“The Omni Circular: What You Need to Know to Administer a 21st Century Education Program” New York State Education Department October 8, 2014 Presented by Michael Brustein,

Report
“The Omni Circular:
What You Need to Know to
Administer a 21st Century
Education Program”
New York State Education Department
October 8, 2014
Presented by
Michael Brustein, Esq.
[email protected]
Brustein & Manasevit, PLLC
www.bruman.com
The Major Themes Impacting
Federal Grants Management
2
1. FOCUS ON OUTCOMES
2. PERFORMANCE METRICS
3. RISK ASSESSMENTS
4. FINANCIAL MANAGEMENT POLICIES
5. EQUIPMENT USE
6. MICRO PURCHASES
7. CORRECTIVE ACTION
8. FAMILY FRIENDLY POLICIES
9. FALSE CLAIMS CERTIFICATIONS
10.AUDIT THRESHOLDS
Key Dates:
3
 Dec 26, 2013
Federal Register
http://www.gpo.gov/fdsys/pkg/FR-2013-1226/pdf/2013-30465.pdf
 June 26, 2014
ED Draft EDGAR
Changes
 August 29, 2014
COFAR Releases FAQ
 Dec 26, 2014
Final EDGAR
Published
Date of Applicability of Revised Rules
4
 OMB stated on 12/20/13
after December 26, 2014
? ? ?
All Drawdowns,
What is covered?
5
 A-102 – Administrative Rules State / Local
– Part 80 – EDGAR
 A-110 – Administrative Rules
Postsecondary – Part 74 – EDGAR
 A-87 – Cost Rules – State / Local
 A-21 – Cost Rules – Rules – Postsecondary
 A-122 – Cost Rules – Nonprofit
 A-133 – Audit Rules (>$750,000)
Who is covered?
6
 All “nonfederal entities” expending
federal awards
Reasons for the Change?
7
1. Simplicity
2. Consistency
3. Obama Executive Order on Regulatory
Review
 Increase Efficiency
 Strengthen Oversight
Structure of Omni-Circular
(p. 78608)
8
2 CFR PART 200
(p. 78608)
9
 Subpart A – Definitions
 Subpart B – General Provisions
 Subpart C – Pre Award Requirements
 Subpart D – Post Award Requirements
 Subpart E – Cost Principles
 Subpart F – Audit Requirements
Key Definitions
10
 Cognizant Agency for Audit 200.18 (78611)
 Cognizant Agency for Indirect 200.19 (78611)
 Computing Devices 200.20 (78612)
 Cooperative Audit Resolution 200.25 (78612)
 Cost Objective 200.28 (78612)
11
 Internal Control Over Compliance 200.62 (78615)
 Major Program 200.65 (78615)
 Micro Purchase 200.67 (78615)
 Modified Total Direct Cost 200.68 (78615)
 Non-Federal Entity 200.69 (78615)
12
 Conflict of Interest
200.112
(78621)
13
 Mandatory Disclosures
200.113
(78621)
Financial Management
Controls
The Key Component to
Federal Grants
Quick Overview of New Financial Management
Requirements:
15
1.
2.
3.
4.
5.
Performance Metrics
Risk Management
Augmented Pass-Through Responsibilities
Emphasis on Immediate Corrective Action
Cooperative Audit Resolution
WHY??
16
All oversight will examine financial management
controls:
1) OIG Audit
2) Single Audit
3) Federal Program Monitoring
4) “Pass Through” Monitoring
17
 New Risk Assessment Will be Based on Financial
Management Controls
18
 The more attention paid to financial management
controls, fewer headaches down the road!!!
Crosswork Between 34 CFR 80.20 (b) and
CFR 200.302(b)
19
34 CFR 80.20 (b)
1. Financial Reporting
2. Accounting Records
3. Internal Control
4. Budget Control
5. Allowable Cost
6. Source Documentation
7. Cash Management
2 CFR 200.302 (b)
1. Identification of
2.
3.
4.
5.
6.
7.
Awards
Financial Reporting
Accounting Records
(Source Docs)
Internal Control
Budget Control
Written Cash
Management
Procedures
Written Allowability
Procedures
1) Identification of Awards (New)
20
 All federal “awards” received and expended
 The name of the federal “program”
 Identification # of award
 CFDA Title and Number
 Federal Award I.D. #
 Fiscal Year of Award
 Federal Agency
 Pass-Through (If S/A)
2) Financial Reporting
21
 New shift to OMB approved
performance metrics
2) Financial Reporting (cont.)
22
 Accurate, current, complete disclosure of financial




results of each award
(Old) in accord with the financial reporting
requirements of the grant
(New) in accord with 200.327 and 200.328
200.327 – Federal awarding agency can only collect
OMB approved data elements, no less than annually, no
more than quarterly
200.328 – Non federal entity must submit performance
reports at intervals required by federal agency or pass
through. Annual performance reports due 90 days after
reporting period; Quarterly performance reports due 30
days after reporting period
2) Financial Reporting (cont.)
23
 Performance Metrics:
1.
2.
3.
Compare actual accomplishments to
objectives. (quantify to extent possible)
Reasons goals were not met if
appropriate
Additional pertinent information (e.g.
analysis and explanation of cost
overruns, high unit costs)
2) Financial Reporting (cont.)
24
4.
Significant developments
a. Problems, delays. Adverse conditions that
would impair ability to meet objective of the
award
b. Favorable developments. Finishing sooner
or at less cost
2) Financial Reporting (Cont.)
25
 OMB Allows ED to waive “performance metrics” not
required.
 How will ED reconcile performance metrics with
accountability / performance indicators of ESEA,
IDEA, CTE, AEFLA
3) Accounting Records
(Source Documentation)
26
 Combines 80.20 (b)(2) and 80.20 (b)(6)
 Source Documentation on:
1.
Federal Awards
2.
Authorizations
3.
Obligations
4.
Unobligated balances
5.
Assets
6.
Expenditures
7.
Income
8. Interest (New)
 Eliminated
liabilities
4) Internal Control
27
 Essentially same as 80.20 (b) (3)
 Effective control over and accountability for:
All funds
2. Property
3. Other assets
 Must adequately safeguard all assets
 Use assets solely for authorized purpose
1.
4) Internal Control 200.303 (cont.)
28
 Cross reference 200.303 (New)
 Internal controls “should” be in compliance with
Comptroller General’s “Standard for Internal Control
Integrated Framework” and “Internal Control
Integrated Framework” issued by the Committee of
Sponsoring Organizations of the Treadway
Commission
4) Internal Control 200.303 (cont.)
29
 Comply with federal statutes, regs, terms of the
award
 Evaluate and monitor compliance
 Take prompt action when instances of
noncompliance are identified
 Safeguard protected personally identifiable
information
5) Budget Control
30
 Same as 80.20 (b)(4)
 Comparison of expenditures with budget
amounts for each award
6) Written Cash Management Procedures (New)
31
 Written Procedures to implement the
requirements of 200.305
6) Written Cash Management Procedures (cont.)
32
 For states, payments are governed by
Treasury – State CMIA agreements 31 CFR
Part 205
 No Change
6) Written Cash Management Procedures (cont.)
33
 For all other non federal entities, payments
must minimize time elapsing between draw
from G-5 and disbursement (not obligation)
6) Written Cash Management Procedures (cont.)
34
 Written procedures must describe whether non-
federal entity uses:
Advance Payments (preferred)
1)
•
Limited to minimum amounts needed to meet immediate cash
needs
Reimbursement
2)
•
Pass through must make payment within 30 calendar days
after receipt of the billing
Working Capital Advance
3)
•
The pass through determines that the nonfederal entity lacks
sufficient working capital.
Allows advance payment to
cover estimated disbursement needs for initial period
6) Written Cash Management Procedures (cont.)
35
 Non federal entity must use existing
resources before requesting an advance:
program income, refunds, rebates, interest
earned
6) Written Cash Management Procedures (cont.)
36
 For all other non federal entities, payments must
minimize time elapsing between draw from G-5 and
disbursement (not obligation).
6) Written Cash Management Procedures (cont.)
37
 Payments must not be withheld from
nonfederal entities unless finding of
noncompliance debt to the U.S.
(Treasury Offset Program), or
nonfederal entity is withholding
payment to a vendor to assure
satisfactory completion of work
6) Written Cash Management
Procedures (cont.)
38
 Advances must be maintained in insured accounts
 Pass through cannot require separate depository
accounts
 Accounts must be interest bearing unless:
1. Aggregate federal awards under $120,000
2. Account not expected to earn in excess of
$500 per year
3. Bank require minimum balance so high, that
such account not feasible
6) Written Cash Management Procedures (cont.)
39
 Interest earned must be remitted
annually to HHS
 Interest amounts up to $500 may be
retained by non federal entity for
administrative purposes
7) Written Allowability Procedures (New)
40
 Written procedures for determining
allowability of costs in accord with
Subpart E – Cost Principles (see p.
78639 – 78662)
7) Written Allowability Procedures (Cont.)
41
 Not a restatement of Subpart E
 But a GPS through grant development
and budget process
 Training tool for employees
42
 Payment
200.305
(78625)
43
 Program Income
200.307
(78627)
44
 Revision of Budget and Program
Plans
200.308 (78628)
45
 Period of Performance
200.309
(78629)
Compare to EDGAR
34 CFR 76.708
46
 Insurance Coverage
200.311
(78629)
Compare to 34 CFR 76.708
47
 Equipment
200.313
(78629)
Significant changes on use and
disposition
48
 Supplies
200.314
(78630)
Covers computers
Procurement “Bear Claw”
49
50
 Contract vs. Grant 200.330
Note
the difference!!
Pass-Through Agency
Responsibilities
51
52
 A pass-through entity means a non-federal entity
that provides a subaward to a subrecipient to carry
out part of a federal program.
-200.74
(e.g. ESEA, IDEA, CTE, AEFLA)
53
 Under EDGAR / A-102, pass through
responsibilities primarily described in 34 CFR
80.40 – Monitoring of Subgrantees
 (Note – Part 76* on S/A programs will not change
significantly)
*And Part 75
54
 But OMB / COFAR shifted many new responsibilities
to the pass-through, over and above 80.40
55
 Omni Circular NPRM (February 1,
2013) proposed reduction of the
number of types of compliance
requirements in the compliance
supplement
56
 Many pass-throughs opposed this reduction
because of burden on them. OMB punted
p. 78608
Monitoring Responsibilities of the Pass-Through 200.328
34 CFR 80.40
57
 Non federal entity is responsible for oversight
of the operations of the federally supported
activities
New Risk management
Requirements for Pass-Throughs
58
59
 Pass-through must evaluate each
subrecipient’s risk of non compliance
(federal statute / regulations / terms of
award) for purpose of monitoring
200.331
60
 Risk Factors:
1.
2.
3.
4.
Subrecipient’s prior experience with the
grant program
Results of previous audits
New personnel or substantially changed
systems
Results of federal monitoring
200.331
61
 Pass-through may impose conditions on subgrant
based on risk assessment:
1. Shift to reimbursement
2. Withhold payments until evidence of
acceptable performance
3. Require more reporting
4. Require additional monitoring
5. Require additional technical or management
assistance
6. Establish additional prior approvals
200.331
62
 Pass-through must monitor its
subrecipients to assure compliance and
performance goals are achieved
200.331
63
 Monitoring must include:
1.
2.
3.
Review financial and programmatic reports
Ensure corrective action
Issue a “management decision” on audit
findings if the award is from the pass-through
200.331
64
 Types of monitoring tools (depending on risk
assessment)
1. Providing training and technical assistance
2. On-site reviews
3. Arranging for “agreed upon procedures” (less
than $750,000)
200.331
65
 Pass-through must verify all subrecipients (>
$750,000) have single audits
200.331
66
 Pass-through must adjust its own financial records
based on audits, monitoring, on-site reviews
200.331
67
 Pass-through must consider taking enforcement
action based on non compliance:
1.
2.
3.
4.
5.
6.
Temporarily withhold cash payments pending
correction
Disallow all or part of the cost
Wholly or partly suspend the award
Recommend to federal awarding agency suspension /
debarment
Withhold further federal awards
Other remedies that may be legally available
200.339
68
 The pass-through may terminate the award for
“cause”, notice and opportunity for hearing (200.340
and 200.341)
Record Retention (78636)
69
 Retention 200.333
 Collection and Transmission
200.335
 Access 220.336
Non-Compliance (78637)
70
 Remedies 200.328
 Termination 200.339
 Notification 200.340
 Appeals 200.341
 Suspension 200.342
 Collection of Amounts Due 200.345
Subpart E – Cost Principles
(78639)
71
72
 Policy Guide 200.400 (78639)
Basic Considerations (78640)
73
 Composition of Costs 200.402
 Allowability 200.403
 Reasonable Costs 200.404
 Allocability 200.405
 Applicable Credits 200.406
 Prior Written Approval 200.407
Direct and Indirect Costs (78642)
74
 Composition of Costs 200.412
 Direct Costs 200.413
 Indirect Costs 200.414
75
 False Claims Certifications
200.415
(78643)
76
 Promotional Costs
200.421
(78645)
77
 Personnel Compensation
200.430
(78646)
78
 Conferences
200.432
(78650)
(see Attachment)
79
 Costs of Appeals
200.435
(78651)
80
 Employee Morale
200.437
(78652)
81
 Memberships
200.454
(78657)
82
 Student Activity Costs
200.469
(78660)
83
 Travel Costs
200.474
(78661)
84
 Audits
200.500
(78662)
Questions?
85
Disclaimer
This presentation is intended solely to provide
general information and does not constitute legal
advice. Attendance at the presentation or later
review of these printed materials does not create
an attorney-client relationship with Brustein &
Manasevit, PLLC. You should not take any action
based upon any information in this presentation
without first consulting legal counsel familiar with
your particular circumstances.
86

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